In our Vero Beach Real Estate News for August 2015 We're Taking an In-Depth Look at Millennials and Why They Can't be Blamed for Low Home Ownership Rates:
Millennials Are Not Why Vero Beach Home Ownership Rates Are Down
Vero Beach home ownership rates are the lowest they’ve been in 48 years, and there are several factors involved, including a strong rental market and a lack of traditional household formation. But let's look at why millennials are NOT to blame for the lower rate in Vero Beach home ownership.
Some stats about Millennial homebuyers — those aged 34 and younger — that show that they are not only buying homes, but also what trends they're following as they do.
According to a study of generational trends (namely, Millennial home buyers) by the National Association of Realtors, 65% are married couples, 14% are unmarried couples, 12% are single females, 8% are single males and other combinations create the last 1%. So, being unmarried isn’t keeping Millennials from joining the ranks of Vero Beach home ownership.
Millennials are also working more now than they were even compared to last year, with unemployment down to 5.3% as of June 2015, as opposed to last year’s 6.1% in June, according to the US Department of Labor.
Stats and trends show that Millennials are moving out of the rental market and buying the homes they once rented. Forty-nine percent are buying in the suburbs, 21% in urban areas, 17% in small towns, 13% in rural districts, and 1% are buying in resort towns. This is a more diverse buying pattern then those from 35-49, who are buying 60% of their homes in the suburbs.
Not only are Millennials buying homes, but they’re relying on real estate agents to make the deal happen. The study shows 90% of Millennials used an agent to close their deals, with only 5% going through a builder and 4% buying directly from the previous owner.
Technically, if you wanted to blame a generalized age group for the dip in use of real estate agents, Gen X, those in the 35-49 age range, could qualify, since only 88% of those homebuyers used an agent.
Millennials are definitely joining the ranks of Vero Beach home ownership, but let's look deeper into the trends of this age group to see why more are not buying a home.
Why the Vero Beach Housing Market is Changing for Millennials
According to the same recent study by the NAR, Millennials prefer walking over driving by 12 percentage points. Millennials want to live within walking distance to shops and restaurants, and have a short commute to work. They also favor expanding public transportation and alternatives such as biking. This is the largest margin in favor of walking for any generation, ever.
The Vero Beach housing market may be seeing a drop in overall numbers of those owning homes now versus past years because of the disinterest in traditional single-family homes by these Millennials prefering to walk rather than commute to and from work and recreation.
Nearly half of Americans participating the recent survey by the NAR said they would prefer to live in neighborhoods that have small yards but are in easy walking distance to stores and restaurants, vs neighborhods with large yards but where driving is required to get to amenities.
Around 60 percent of Americans live in detached, single-family houses, but one in four of these individuals would rather live in an attached home in a more walkable neighborhood.
Even though the job market is improving, it seems that more and more Millennials are living with their parents today than they were at the height of the Great Recession. We'll look deeper into this in a moment.
It's no secret that Millennials have had a tough time getting started with careers, families and saving for retirement. And this struggle has carried over into home ownership as well.
Everything from the recession, to the rising cost of higher education, to the increasing scarcity of better-paying jobs has taken its toll on people born in the last two decades of the 20th century.
Many Millennials feel there is no hurry to own their own Vero Beach home, because of how the economy has changed. Our current economy has shifted to a knowledge-based or connection-based economy, and we are seeing people now work well into their 70s, 80s and beyond. So many Millennials feel they have plenty of time to become home owners.
More Millennials Live With Parents
According to a new Pew Research Center analysis of U.S. Census Bureau, which found that the share of young adults living in their parents' homes has increased from 24 percent in 2010 to 26 percent in the first quarter of 2015. During the same period, the unemployment rate for adults ages 18 to 34 dropped from 12.4 percent in 2010 to 7.7 percent this year.
Despite the fact that there are 3 million more Americans in the 18-34 range now than there were in 2007, the number who are living independently has fallen from 42.7 million in 2007 to 42.2 million today.
This trend could be one reason why the economy, and namely, the Vero Beach housing industry, isn't growing stronger than it is.
The growing young adult population has not fueled demand for Vero Beach housing units and the furnishings, telecom and cable installations, and other ancillary purchases that accompany newly formed households according to the Pew Research Center.
Millennial women, by the way, are more likely to leave the nest than millennial men, and fewer women tend to buy a home on their own than do men.
So what do we glean from all this Millennial data?
Trends have changed. Potential Vero Beach homebuyer desires have changed. Has the real estate market failed to change with the demand? Something to think about!